The Ultimate Guide To Company Culture

Tanya Pinto • Oct 22nd, 2016

We hear a lot about the importance of workplace culture, but what does it exactly mean? Academically, ‘culture’ is a collection of values, beliefs, attitudes, behaviours and relations that is created over generations, by collective effort. Culture is something that has been around for as long as humans have existed.

Translated into a workplace, ‘culture’ still means the same thing. A company’s culture is what characterizes the organization. It is the merging of the company’s values, beliefs, attitudes and the relationships that colleagues share amongst themselves or with customers. While this may seem quite complex to grasp, it is really quite simple to understand. If you want to know exactly what your company culture is, take a look at your organization’s most recent vision or mission statement. What are the various values and ideas listed within the text? A quick glance through the statement will reflect the gist of your company’s culture. In fact, a mission statement is often an organization’s only worded document describing its ideal workplace culture.

Company culture is important because it is key to boosting employee engagement. Let me explain how that works. Company culture is what reflects the values and attitudes of the overall workforce, whereas employee engagement is how it translates into individual employee motivation. This illustration explains the link wonderfully:

As a Deloitte report reveals that 87% of organizations cite ‘culture’ and ‘engagement’ as their main challenges, it is a critical theme to address.

While an ambitiously written mission statement explains the ideal culture the company strives for, reality can often be quite different. It may seem that the company’s “mission statement” expresses an ideal workplace culture, but often it does not actually trickle down to individual employees. Writing a mission statement is easy, building a great company culture can be a lifelong undertaking.

In 2016, Amazon Founder and CEO Jeff Bezos, released a statement about the company’s culture. He claimed Amazon’s organizational culture is all “about customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long-term, and the taking of professional pride in operational excellence.” He continued, “Over the last two decades, we’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful.” This highly successful international retailer claims to have a strong company culture. The value that stands out is: encouraging innovation.

While this may seem perfect at a macro-level, the day-to-day working of the company is quite the opposite. Employees at Amazon are often stressed by unrealistic targets assigned to them. It is common knowledge that Amazon is notorious for overworking its employees, as many media reports have shared.

According to the New York Times, Amazon has an extensive orientation session for new recruits. An employee revealed that during one such session, the recruits were told to let go of “poor habits” they learnt over previous jobs. Whenever they “hit the wall” due to the fast-paced work, apparently they were instructed that there was no option other than “climbing the wall.” The same report claims that, “At Amazon, workers are encouraged to tear apart one another’s ideas in meetings. The internal phone directory instructs colleagues on how to send secret feedback to one another’s bosses. Employees say it is frequently used to sabotage others.” In reality, this seems to indicate an unhealthy atmosphere for creativity and innovation. While the apparent mission statement of Amazon strives to achieve great innovation, the reality of how Amazon runs may encourage the opposite.

Just like this example, it often happens that a company’s ‘ideal’ culture is a far cry from how individual employees go about doing their work. There is often a huge disconnect between the ‘expected’ company culture and the reality of individual employee engagement – and bridging this gap is key is boosting workplace productivity.

The first step to doing this, is to recognise and identify what causes employees to deviate from the company’s mission values. More often than not, it is the organization’s structures and processes which are not in sync with the company’s ideal culture. In order to devise a solution, let’s delve deeper into where corporate culture comes from, and how it shapes an organization’s functioning.

Where does company culture come from?

A company’s culture is largely shaped by the initial beliefs of the organization’s founder or earlier leaders. Their ideas are usually carried forward even after they aren’t around anymore, unless there’s a strong external successor who takes over. Usually, it is the founder’s ideology which continues as a cultural legacy in a company. These ideas and beliefs tend be shared uniformly across the company, and usually remain consistent over time. Broadly known as “company culture,” this is what gives a company its unique personality.

A great illustration of this is the case of the Brussels offices of Arthur D. Little and McKinsey & Co, in the nineties. Both these organizations worked in the same industry of management consulting, and targeted the same type of clients. However, the stark difference in their working style was interesting to observe. Here’s how they maintained their unique company cultures, and how it seemed to get carried forward across generations of employees.

Creative Chaos at Arthur D. Little: This organization did not seem to worry much about numbers, and instead focused on actual client feedback and recommendations to shape how employees work. Data analysis was not emphasised much, and there were no rigid formats required for presentations. In fact, the organization saw this as one of their greatest strengths, describing this approach as a desirable and positive ‘chaos.’ Each employee was free to pursue his own unique approach to dealing with a particular task. During lunch hours, team members often shared meals together, which became great opportunities for strengthening coworker relationships. Arthur D. Little thus identified itself as a ‘Company.’

Arthur D Little – arguably the first management consultant!

Consistent Consulting at McKinsey & Co: On the other hand, McKinsey & Co wanted its Brussels workforce to follow a work approach which was similar to its international offices. There was a pre-decided format to be followed for presentations, which was approved by a global committee of senior directors. Employees were subject to regular and extensive evaluation, about once every six to twelve weeks. Every assignment was thoroughly examined to understand where performance could be improved, and every business decision was strongly backed by data. Most employees ate lunch out of office, and it was not common to socialise with colleagues. McKinsey & Co identified itself more as a ‘Firm.’

Both companies were from the same industry and were very successful at the time (Arthur D Little has since fallen from grace), but their individual company cultures defined how they functioned.

How company culture affects employee performance

Beyond all the jargon, company culture is critical because research has proved it’s one of the strongest drivers of company and employee performance. In fact, many of the world’s greatest leaders and management theorists consider culture the key to long-term business success.

Peter DruckerThe father of modern management

“Culture eats strategy for breakfast”

Jack WelchLegendary CEO of General Electric

“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”

Larry PageCEO and Co-founder of Google

“My grandfather was an autoworker, and I have a weapon he manufactured to protect himself from the company that he would carry to work. It’s a big iron pipe with a hunk of lead on the head. I think about how far we’ve come as companies from those days, where workers had to protect themselves from the company. My job as a leader is to make sure everybody in the company has great opportunities, and that they feel they’re having a meaningful impact and are contributing to the good of society. As a world, we’re doing a better job of that. My goal is for Google to lead, not follow that.”

Studies show that high-performing organizations have a strong company culture.Experts believe one mechanism for this is because when someone within the company discovers a great way to successfully achieve targets, a strong culture enables them to disseminate it across the rest of the organisation. Since a strong culture usually also indicates great communication, collaboration, and trust, it is much easier for various employees, whether senior or junior, to give each other ideas and feedback.

Although culture and performance have been studied for decades, it wasn’t until recently that culture was proven to actually drive performance, rather than just be correlated with it. In a six year study of 100 US car dealerships, Boyce et al showed that culture “comes first,” consistently predicting subsequent ratings of customer satisfaction and vehicle sales. Furthermore, it was shown that the reverse is not true. Success does not ensure a strong, positive culture will develop, and if a business achieves success without culture, over the long run that success will diminish. In a nutshell, only culture can drive long term success.

How to build a great company culture

The secret to building a cutting-edge company culture is possibly one of the most reclusive concepts. In many ways, it is similar to building a cult consumer brand, or an actual cult! How do you get employees to band together to achieve goals as a team, and what causes employees to become part of a shared set of values and ideas across the organization? While there might be several answers to this question, we have combed through the profiles of various successful companies to discover the secret. These are the key ways to create a strong company culture.

Familiar, impressive leaders: According to the 2014 Global Workforce Study by Towers Watson, effective leadership is one of the top drivers of sustainable engagement. In simpler words, this means that employees are more engaged when they are led by awe-inspiring leaders. Even Apple, which could safely be assumed as a technological cult of its own: was driven by the eccentric vision of Steve Jobs, who became the face of the brand. This clearly illustrates the importance of having a the image of strong leaders within an organization.

Hire the right kind of people: The saying “birds of a feather flock together” explains this well. Certain organizations even make sure they sift through prospective employees right at the initial application stage, by asking candidates to answer psycho-analytical tests. Take for example, the American medical technology company Stryker. For several years, this Fortune 500 company has commissioned Gallup to conduct psycho-analytical telephone interviews for its job applicants. The reason: Stryker wants to hire professionals who have personality traits similar to their most successful employees. This is in fact one of the most crucial aspects of creating a culture: hiring competent professionals who fit well within the company’s overall values, goals and successful employee profiles.

Emphasise what makes your organization unique: Most groups are characterised by at least one aspect which makes them different from others. Often, by being drastically ‘different’, they can capture the imagination of followers, who then become unwavering in their decision to be part of the group. This is strongly related to Simon Sinek’s profound “Start With Why”. As Simon states eloquently in the video below, people don’t buy into what you do they buy into why you do it. This is true both for the brands people purchase from, and also for the companies they work for. In fact, the why you do it is even more critical for employer brands, given employees are dedicating a huge part of their life to your company, rather than just the contents of their wallet.

Leverage the social influence of extroverts: This may seem controversial, but it’s been proven by quantitative sociological studies. Extroverts are more likely to sustain a group, by becoming key members and encouraging others to join. While it’s natural that your entire workforce can’t be made up solely of extroverts – you can encourage your employees to promote and take ownership of the company culture. Nothing beats positive word-of-mouth to build an employer brand, both internally and externally. Besides keeping your employees engaged, it will also attract talented professionals to join your organisation.

Use routine to reinforce beliefs and values: The word ‘routine’ here signifies an activity that the group can share together: for example a daily meeting where a team discusses work done and any roadblocks faced. This should be organized at a fixed time everyday, so that employees know they can always share their experiences during the meeting. Such routine helps employees to reconnect with their shared beliefs and encourage them to remain committed to their work goals. Never underestimate the winning power of routine, even Apple founder Steve Jobs wore only black, polo neck shirts to work everyday – he thought that routine helped him think less about appearance and focus better on work!

Cultivate a sense of belonging: This is one of the most underrated aspects in workplaces today. According to neuroscience research by Lieberman and Eisenberger, humans manage their social needs through the same neural networks in their brain that are responsible for basic survival needs like food and water. For people, social relationships matter a lot. Does your organization do enough to make employees feel a sense of unity and belonging? This can be achieved through a variety of ways: introduce common workspaces, offer free team meals, and celebrate achievements and special events together in office. Make your employees feel at home at their workplace.

Boost communication: The importance of good communication cannot be stressed enough. One of the most effective forms of this is to encourage employees to share their opinion and experiences during regular team meetings. Also, as a manager, you should offer frequent feedback to your team members, at least on a monthly basis. As research shows, employees prefer more frequent feedback, and it helps increase employee engagement. While it can become quite disorganised and tedious to share opinions via emails, there are plenty of better options these days. Popular apps like Slack enables quick intra-company messaging, and you can use employee engagement platforms – such as Peakon – to collect and analyse team feedback. These are cost-effective and easy ways to strengthen your company culture.

Create motivating mottos: While this may seem cheesy at first, it’s actually one of the simplest ways to reinforce the company’s goals and values across the organization. Almost everyone knows how positive affirmations can boost people’s motivation to achieve a target. In fact, Rhonda Byrne’s book The Secret is all about the importance of repeating and reminding yourself of your goals. While the book itself is based on questionable science, it reiterates an important truth: a motto can help you stay focused about what you want to achieve, enables people to rally around shared objectives or philosophies, and can motivate you to overcome challenges along the way. In order to remind your employees about what the organization stands for- create a catchy motto they can repeat!

The best company cultures

Google: It’s no surprise that Google has one of the world’s most successful company cultures. The range of perks offered to employees include free meals, bicycles to ride to work, and an excellent office space. All of these encourage employees to build stronger relationships with colleagues and feel motivated about work. To quote a Google employee; “The amenities are great. The food is fantastic. There is something different every day of the week. It is obvious that Google loves its employees. The culture is amazing too. Each employee does not mind helping the other out if they are stuck. I feel it is encouraged to reach out to others.”

Apple: Apple is renowned for encouraging innovation and a strong team working spirit. As written on the company website, here’s what Apple is proud of, “We’re perfectionists. Idealists. Inventors. Forever tinkering with products and processes, always on the lookout for better.” According to Cory Quinn from the Marketing department, “Apple’s collaborative company culture is, hands down, my favourite thing about working here. They don’t just allow the free exchange of ideas, they expect it.” Evidently, it’s one of the world’s most successful and inventive technology companies, and its collaborative culture is at the heart of it.

Facebook:Facebook’s main employee campus at Menlo Park, California, is touted to be inspired by Disneyland. The company’s employees can use the restaurants and shops for free. Do we need say any more? As Facebook describes itself, it encourages employees to “Be unique. Be authentic. However you prefer to say it, we really mean it. Our culture embraces people’s diverse perspectives and creates a positive environment where everyone belongs.” No wonder Facebook is one of the most sought after employers today, and its business has been outperforming for years.

Southwest Airlines: As described succinctly by the organization itself, culture means this to Southwest Airlines; “the development, improvement and refinement of the originality, individuality, identity, and personality of a given people.” While that sounds like a line straight out of a poem, here’s how Southwest Airlines actually implements it winning culture: it encourages and rewards employees to be more human, and offer world class customer service to clients. As a result, Southwest Airlines employees are renowned for their impeccable customer service skills.

Nike: Here’s what Nike tells its prospective employees, “Leave average in the dust. Create, take risks and pursue greatness at Nike.” The company is proud of its culture of “curiosity and innovation.” The company has been quite successful in pursuing these culture goals as well. A Nike employee shares, “There is a lot of positive energy around new ideas and a lot of autonomy to try new ideas and bring ideas to creation.” This demonstrates that Nike’s ideology of encouraging employees to “create” and “take risks” is actually how the employees feel about the organization. This is how companies achieve success- they bridge the gap between the culture described on the mission statement, and the way their employees actually work.

So what can we learn from these enlightening examples? What’s the secret behind their success? There is something they share in common: while all of these organizations have their own set of guiding values, they are successful because there is little gap between their ‘ideal’ culture and its actual implementation. This is what you should aim to achieve with your organization.

Conclusion

I hope by now we have convinced you that culture is one of the key drivers of business success. Although building – or turning around – a company culture might seem like a daunting task, don’t let it intimidate you. You have to do it. As we explained, every organization has its own ‘unique’ personality, and while there is no one-size-fits-all solution to creating an effective company culture, there are plenty of strategies you can employ.

In order to build an effective company culture, first have a look at what sets your company apart. Start with why. Why do you do what you do, and what makes you different from all the other competitors? Once you have identified that, make sure everyone knows it; both your employees and your customers. Everything from including those unique values in employee onboarding manuals, to designing a sales approach around them. Make sure you strongly define your company values, and then live and breathe them in every part of the organisation.

Next, adopt a strategy to positively shape your company culture, and make it a driving force to motivate employees:

Share inspiring messages from the company founders or early leaders

Hire employees who fit your organization’s values

Encourage employees to socialise and celebrate with each other

Use regular events to reinforce beliefs and values

Offer your employees a sense of belonging

Boost communication

Create motivating mottos and messages

While you need to choose an approach based on the individual uniqueness of your company, there are plenty of successful organizations you can borrow ideas from. As Pablo Picasso (and Steve Jobs) once said; “good artists copy, great artists steal.”

A good company culture is critical to achieving long-term success. If you want to build a successful company, start building your culture now!